Top 5 Myths about EMV Every Merchant Should Know

If you accept credit cards in your brick-and-mortar business, you hopefully have heard the term EMV and are preparing your business to update its current credit card processing terminals.

More and more payment card issuers are replacing old payment cards with new ones which feature an embedded chip.

After October 1st, if a data breach causes customer financial data to be exposed, the liability for such a breach will fall to whichever party in the transaction has the lesser technology.

When a change like this affects so many merchants at the same time, deciding how to proceed can be stressful and even a bit confusing.

While much is known about EMV technology, there are also quite a few misconceptions. In this article, we’ll address 5 common EMV myths.


Myth #1: EMV will make debit and credit card transactions completely safe and secure.

FACT: EMV terminals and chip-and-pin cards will lead to a reduction in fraud via data encryption, but will not eliminate payment card fraud altogether. A recent study in the U.K. showed that prior to EMV deployment, counterfeit cards represented up to 40% of all payment card fraud. After EMV that number dropped to only 10%.

The remaining fraud is most likely perpetrated on consumers without chip-and-pin cards. That same study showed a dramatic increase in Card Not Present, or CNP fraud, which most often occurs online or via telephone. This suggests that fraudsters have decided not to spend their time trying to outwit EMV technology, and have shifted their efforts to online fraud.

If a merchant stores consumer data such as name, address and credit card information on their own networks, they are still potential targets for attacks via malware exploits, etc. Companies storing this type of data need to take measures beyond that required for EMV to secure it from being accessed illegally.


Myth #2: Upgrades to EMV terminals by October 2015 are required by the U.S. law.

FACT: While the U.S. government has publicly endorsed the new standard, and pledged to upgrade terminals in government offices that accept payments, such as DMV and the court system, the Obama administration has only made upgrades mandatory for processors, not merchants.

This doesn’t mean merchants should ignore what’s happening … far from it.

All major card brands are free to dictate who liability falls to in cases of fraud. In this case, all have agreed that after October 1st, the party with the least amount of protection will be liable.

Constellation Payments suggests that upgrading to EMV terminals, while not governmentally mandated, is HIGHLY advisable for all merchants who wish to avoid huge penalties and other liability.


Myth #3: Upgrading is costly.

FACT: Merchants who choose to purchase a terminal may be surprised as to how affordable they are. The new terminals also come with new revenue-producing functionality, such as couponing and targeted upselling opportunities.

At Constellation Payments, we’ve taken extra steps to provide highly-secure, EMV-compliant terminals for every budget, and we’ve also included the ability for any merchant to rent terminals instead of buy them. If you have any questions about this, please don’t hesitate to email me at


Myth #4: Only merchants with high volume need to worry about EMV.

FACT: Small business owners may think that because their transaction amounts are lower, they are less of a target. The truth is that when EMV was implemented in the U.K. for example, the targets for fraud tended to be those who had the least secure systems, and that was almost always the merchants who had yet to convert to EMV. Once the majority of U.K. merchants upgraded to EMV terminals, terminal-based fraud dropped significantly.


Myth #5: Once merchants implement EMV, they can no longer accept older magnetic stripe cards.

FACT: Consumers will still be holding cards with magnetic stripes for at least the near future. For that reason, EMV-compliant readers will also have magnetic stripe readers included. These transactions will still be able to be processed. If a consumer has an EMV chip-and-pin card, and it is swiped by either the consumer or the merchant through a magnetic stripe reader, data on the magnetic stripe will inform the terminal that there is a chip present, and ask that the card be inserted into the chip reader.

While these are 5 common misconceptions, there are many more questions for both merchants and software providers. If you or your merchants have questions regarding moving to an EMV-ready solution, please do not hesitate to send them to me at

Image of number 5 courtesy of

Grey Divider

Rick Ellis is a Business Development Executive with over 20 years of experience running a successful membership-based company built around a lucrative recurring revenue business model. As an Executive for Constellation Payments, a fully integrated and proprietary payment gateway and merchant service provider, as well as for Member Solutions, a leading provider of full-service billing for enterprise businesses, Rick enjoys working through complex business models, and leveraging proven payment processing strategies for maximum effect.

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